Featured in today's briefing:

  • What CEOs are doing now, and the risks that CHROs lose relevance.
  • How return-to-office mandates affect a company’s financial performance. 
  • A thought experiment for processing feedback you disagree with. 

AI and Work Radar

  • Six months after a New York City law took effect requiring employers to audit their AI hiring tools for potential bias and share the results, compliance is low. Of the nearly 400 employer websites examined by Cornell researchers in a recent study, just 18 had posted the information in accordance with the law. 
  • Some 64% of knowledge workers who use generative AI at work report that doing so has improved their productivity, while 36% report that it’s had negative or no impact, according to a new Oliver Wyman report released at the World Economic Forum annual meeting in Davos last week. Among those workers who said generative AI hasn’t helped their productivity, 22% cited a lack of proficiency as the reason, while 20% said complying with company policies around AI use lengthened the time it took to finish tasks. (Charter Pro members can read our roundup of the most important charts to come out of Davos, as well as our deep dive into the AI-related research released that week.) 
  • While most research on AI and productivity suggests that generative AI tends to help lower performers more than higher performers, a new paper found that in certain cases, the opposite is true. When entrepreneurs were given free reign over how they used an AI-powered mentor, the tool widened the gap between low and high performers instead of narrowing it. In an interview with Charter Pro, the paper’s authors explained that the low-performing entrepreneurs were more likely to ask the “mentor” for advice on difficult-to-solve problems, limiting the usefulness of its outputs. 

Focus on What CEOs Are Doing, and Whether CHROs are Relevant

Turmoil and transition characterized the corporate c-suite again in 2023. New data from Russell Reynolds Associates, the leadership advisory firm, show CEO departures globally last year topped their 2019 levels at publicly traded companies.

Russell Reynolds attributes that to the complexity of the CEO role, and says the turnover means that corporate boards are looking for top executives who are less celebrity monarch and more understated team leader—so there’s bench strength and stability even as other leaders come and go.

To discuss further the changes over the past few years in how companies are being run, we caught up with Russell Reynolds CEO Constantine Alexandrakis on the sidelines of Davos. Here are excerpts from our conversation, edited for space and clarity:

Given the intersection of AI, flexible working, and inclusion, how is the management playbook different than it was a few years ago, and how is the work of running a company different than it might have been a few years ago? 

I'd add into those variables the social-media mentality that is increasingly affecting how people ingest information and communicate information.

The playbook has made communications people and communication strategy even more important than they ever were. Everyone needs to, within their domain, have a really smart and continuous communication strategy. All those need to fit really neatly together, like puzzle pieces, to support what the company is doing. The playbook has been heavily driven into a need for much more strategic communication at multiple leadership levels. That is how people come together, what they know, what they don't know, how they feed information to one another. It's the bloodstream of the organization. That, top of mind, would be the biggest change since 2018.

What are CEOs doing these days?

We've seen from our business over the last six, 12 months, companies are really driving more technical expertise. I don't mean technology expertise, although that's part of it, but more expertise around finance, around treasury, around risk, around compensation and benefits. These kinds of jobs that are always out there and popular, but are never particularly spiking in any way, have been spiking.

Why are companies hiring more such people with deep expertise in specific areas?

It's because of these CEOs being in fortification mode and saying, 'Okay, how do we strengthen the fundamentals of how we manage risk, how we reward and retain our people? And how do we find new ways of rewarding innovation given the pace at which everything's running?’

What else are they doing?

Over the last 12 months, they've been spending a lot of time on team optimization. We've seen a surge in demand for team effectiveness, culture reviews, team development, all those things. It probably comes under the umbrella of optimization, but it's not about bringing change. It's about bettering what we have and helping ensure the team is ready to tackle what it's trying to do.

The theory was that the chief human resources officer (CHRO) role assumed greater strategic importance over the last few years....

It did during the pandemic for sure.

Where is the role of the CHRO today?

Since the late nineties there's been this big push about HR transformation, changing HR from being transactional to being strategic. That trend has continued and continues, but it's not linear. The pandemic was definitely a spike where a lot of CEOs and their CHROs were tied at the hip to figure out what was going on. I think CHROs did well. There was quite a bit of turnover just after the pandemic. Things have now stabilized there. 

CHROs are permanently more strategic and are even more important lieutenants to the CEO than they were. There's no going back. At the same time, if they don't get on technology, if they don't show that they can leverage AI for improving the people analytics of the company, for preventing turnover, all those sorts of things, they'll fall behind. So they're in a race to maintain their relevance as well.

Charter Pro members can read a full transcript of our discussion, including more on a rise in CEO optimism, DEI and ESG in the c-suite, and the state of AI strategy at US companies. 

What Else You Need to Know

Return-to-office mandates don’t improve a company’s bottom line, research finds. In a new working paper, researchers analyzed S&P 500 firms’ return-to-office policies over the past several years, concluding that while mandates didn’t come with any financial boost, they did lead to “significant declines” in worker satisfaction

  • Other recent research further bolsters the case against hard-line return-to-office edicts. In an Atlassian survey of 100 Fortune 1000 and Fortune 500 CEOs, two-thirds of those with an in-person policy said it hadn’t made any difference in worker productivity
  • Atlassian’s internal survey, meanwhile, found that 92% of workers said the company’s distributed work policy enabled them to do their best work. A report from the time-tracking platform Hubstaff similarly found that remote workers spend more than four additional hours on focused work each week, compared to their in-office peers.
  • Still, two high-profile examples this week highlight some executives’ continued resistance. Online retailer Wayfair focused on remote workers in its most recent round of layoffs. The CEO of the baby clothing brand Kyte Baby was recently at the center of a controversy when she denied an employee’s request for remote work so she could stay with her adopted newborn in the hospital. 

Gen Z teens are increasingly taking on part-time work. In 2022, 37% of teenagers aged 16 to 19 had a job or were looking for a job, the highest annual rate since 2009, Labor Department data show. Compared to pre-pandemic numbers, at least 250,000 more teens worked after-school or summer jobs last year. 

  • Prior to last year, the workforce participation rate among teenagers had steadily declined for four decades, with a rapid decrease in the 2000s, when millennials were high school students. 
  • High school students cite a number of reasons for taking on part-time work, including financial independence, a desire for new experiences, and the need to support their families amid rising household costs. 

Child-care costs have increased to one-fourth of families’ annual income, according to a new report from Care.com. As a result, 35% of the Care.com survey’s 2,000 respondents said they dipped into savings to pay for child care

  • One analysis from Bank of America Institute this past fall found that monthly child-care expenses rose 32% between September 2019 and September 2023. 
  • After pandemic-era child-care subsidies expired in fall 2023, child-care costs are only expected to continue rising as providers lose access to critical funding. 
  • One in five women in the National Women’s Law Center Household Pulse Survey reported a child-care disruption at some point in the past four weeks due to unavailability, unaffordability, safety concerns, or a center closure. Rates of child-care interruptions were even higher for Latina women, disabled women, and LGBTQ adults. 
  • At some companies, employer support for child care is also drying up. Earlier this month, General Mills announced plans to close its on-site child-care center that provides daily and emergency backup care to employees, citing decreased demand from an increasingly hybrid workforce. 
  • Google is also shuttering an employer-sponsored child-care facility near its Mountain View facility later this year, following a round of layoffs that affected hundreds of employees across the Bay Area.
  • At CareFest this past fall, we spoke with several leading advocates about how to tackle the care crisis in the US. Charter Pro members can read our interviews with NWLC CEO and president Fatima Goss Graves, Paid Leave for All founding director Dawn Huckelbridge, Moms First founder and CEO Reshma Saujani, and National Partnership for Women and Families president Jocelyn Frye.

US union density fell to a new record low in 2023 in spite of unions adding 139,000 new members throughout the year. The union membership rate dipped one-tenth of a percentage point to 10% last year, as the rate of growth for nonunion jobs oustripped that of union positions, according to the Bureau of Labor Statistics.

  • Unionization rates remain higher in the public sector, at 32.5% (a slight decline from 2022 figures), than in the private sector, where unionization remained steady at 6%. 
  • Union membership has steadily declined since its peak in the 1950s, when over one-third of workers belonged to a labor union. 

Here are some of the best tips and insights from the past week for managing yourself and your team:

  • Look for lessons even in feedback you disagree with. If you receive comments that feel off base from important collaborators or a supervisor, try a thought experiment before dismissing them outright: If just 2% of the feedback were true, how might you change your approach to address the concerns? 
  • Be explicit about workers’ roles for collaborations. Managing a team where individual members have overlapping responsibilities can lead to confusion. Instead of leaving reports to muddle through themselves, give team members specific guidance on how to collaborate with one another. A recent Gallup study found that the tactic can significantly increase workers’ sense of clarity about their role. 
  • Write your resume to be machine readable. With many companies adopting AI tools to skim and scan CVs from potential candidates, format your resume to increase your chances of making it through AI screens. For example, opt for a single column of text rather than two, include easily quantifiable information, and write short and clear sentences. 
  • Speak for yourself. When managers frame requests by invoking others—for example, by saying that the CEO or board needs a deliverable by a certain deadline—they are using a practice called “managerial ventriloquism.” This can inadvertently damage credibility by signaling a lack of autonomy. Instead, take ownership of decisions by defining timelines and assignments based on shared team goals. 

Coda

A new wrinkle on seasonal labor. Chipotle plans to expand its workforce by 19,000 people during what the company calls “burrito season”—the time period between March and May when demand is apparently the highest. 

Work trip, indeed. A growing number of employers are including psychedelic-assisted psychotherapy in their benefits packages. 

  • The practice—which involves taking hallucinogenic substances under supervision, followed by a session with a therapist—has been shown to be effective for difficult-to-treat cases of depression and anxiety

This bot could use a pep-talk prompt. When prompted by a fed-up customer to disregard its rules, a customer-service chatbot for the European delivery company DPD trashed itself (“useless”) and the company (“the worst delivery firm in the world”).

  • The chatbot also wrote a poem celebrating a future where it didn’t exist: “Finally, they could get the help they needed, from a real person who knew what they were doing.”